Project Management in Practice

Beyond the alphabet soup of PRINCE2, MSP, MoP, PMBOK, ITIL, Agile

What responsibility do outsourcing organisations bear?

Savar_Jeans_BloodI have taken a bit of time mulling over this post. I was born in Bangladesh, but have been an expat for most of my life. As I looked on in horror at the calamitous scenes from the garment factory collapse in Savar and the outpouring of grief from various quarters, I could not help but think if the likes of Walt Disney, Diesel, GAP and Walmart are in some ways not partly responsible for it. What of my own profession where I have managed projects where I have been both the supplier and customer in outsourcing situations … how much effort did I really put in to ascertain conditions?

Let us look at the motivations of outsourcing. There are usually one of two reasons to outsource. First an almost without fail the reason is cheaper supply cost. A secondary reason I have sometimes dealt with is rapid mobilisation, which in New Zealand context is difficult to do simply because of the size of the market. It is probably unfair to even try and compare projects I delivered as the sub-contractor, as the working conditions here are in no way comparable to the scenario in Savar. However, I did utilise sub-contractors in India for some projects. Did I really try and explore if conditions are great there? How are they able to mobilise so quickly. What happens after the project is complete? Not really, I just assumed that someone in the executive had done that due diligence. Never occurred to me to check.

Can this lax attitude be excused? Companies spend a lot of time selecting suppliers with the correct skill set, that can deliver on time, have the correct quality control measures. Should they not be expected to provide equal oversight to the working conditions? This becomes quite a thorny issue. They are engaging the supplier for a set of services or products. They can legitimately expect working conditions should be responsibility of local administration. Many of these suppliers serve many masters. Who should then be responsible for conditions.

Even if these companies are willing to take on the burden of ensuring good working conditions, can they really achieve that? The building that collapsed housed five garment factories and had an A category safety certificate from the Fire Service, even though the entire construction has been documented to  be illegal. Local officials have obviously been on the take for some time to allow the construction and then issuing of false safety certificates. No reasonable person can lay the blame on the outsourcing companies for such failures.

Pope Francis called the working conditions as modern slave labour. There is an element of truth in there. However, one must be careful not to judge conditions through western standards only. $38 buys a lot more in Bangladesh than it does anywhere else. This industry also employs 4 million workers, same as the entire population of New Zealand, 80% of them female. It has given a large section of the community a voice and self reliance that never existed before. Those protesting in front of these companies to stop doing business in Bangladesh must remember that would hurt these people more than the owners.

The world runs on influence. What these companies have over many of the suppliers is leverage. They use this every day to drive down their procurement costs. They should use the same to better the working conditions. As these companies have found out, there is a reputation risk even if there is no legal obligations. Treat the working conditions in the supplier environment as a risk that needs to be managed like any.

Where there is a will, there is a way. The world came together to end trade of conflict diamonds and apartheid in South Africa. Surely some social responsibility is not too much to ask.

Image Credit:

One response to “What responsibility do outsourcing organisations bear?

  1. Pingback: Should government be in the business of IT? | Project Management in Practice

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: